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ARTICLE · 24 JUNE 2014

Bankruptcy Code Section 503(b)(9): Goods Shipped Within 20 Days

Pierson Ferdinand LLP
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You ship goods to a company, only to find out that shortly after shipment, it files for bankruptcy.

United StatesInsolvency/Bankruptcy/Re-Structuring
Carl Neff
Carl Neff

It is your worst nightmare.  You ship goods to a company, only to find out that shortly after shipment, it files for bankruptcy.  Now, instead of receiving payment for those goods, you are simply one of many creditors of the debtor's estate.  What remedies do you have under the Bankruptcy Code to recover the amount of the shipped goods?

If the goods were shipped within 20 days of the debtor's filing, then your claim may qualify for "administrative" status under Section 503(b)(9) of the Bankruptcy Code. The Section provides as follows:

(b) After notice and a hearing, there shall be allowed, administrative expenses, other than claims allowed under section 502(f) of this title, including –

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